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Yahoo shares jump on Microsoft buyout rumour

Shares in Yahoo were up over 17 percent last week after rumours emerged of a takeover bid by Microsoft.

The New York Post has reported that Microsoft is in negotiations with Yahoo to buy the company for US$50bn. On current values Yahoo is capitalised at US$38bn.

Meanwhile The Wall Street Journal is reporting that discussions are in early stages for either a full takeover or a joint venture. Yahoo and Microsoft are second and third respectively in the internet search business after Google.

Microsoft is getting increasingly concerned about Google, and the purchase would enable it to challenge the search giant on more equal ground.

Microsoft is also concerned that Google Applications will cut into its lucrative Office business.

In keeping with company policy, a Microsoft spokesman said that the firm does not comment on rumours.

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